From 1 to 50 euro cents: by how much will selling at a loss really bring down the price of gasoline?

Will selling at a loss help lower prices at the pump? This is the bet that the government wishes to take by authorizing the sale of fuel at a loss from December for a period of six months, even though this practice has been illegal since 1963.

“We are not saying that gasoline will drop to 1.40 euros in all stations for six months. We are saying that there may be commercial operations” for motorists who “can no longer refuel,” warned government spokesperson Olivier Véran on RTL Sunday September 17.

A drop of 50 cents?

Concretely, by how many cents can such a measure reduce the price at the pump? Olivier Véran put forward a reduction of 50 euro cents on RTL. “Those who wish, those who can, (…) will be able to sell gasoline at discounted prices. We are almost talking about potentially half a euro less per liter,” declared the government spokesperson.

Pieyre-Alexandre Anglade, president (Renaissance) of the European Affairs Committee at the National Assembly, also estimated that, “if we go as far as 25% reduction in relation to the selling price, it could be okay up to 47 cents saved on a liter of gasoline, it’s a considerable gesture.”

Knowing that the net margin for service stations corresponds to one to two euro cents net for a liter of gasoline sold at the pump, a reduction of 50 cents per liter is considered “insane“ by a senior official from Bercy, on condition of anonymity, quoted by The Parisian Monday September 18.